The potential
of AI in empowering consumersLive Mint,
January 09, 2019

By Pradeep S Mehta

In April 2018, the department of economic development, Dubai,
launched a “Smart Protection” service, which adopts Artificial
Intelligence (AI) to respond efficiently to consumer queries and
resolve their complaints. Through an app called Dubai Consumer,
the service engages consumers in a direct dialogue to gather
information and, within a few minutes, issues an “empowerment
letter” stating details of complaint and instructions to the
retailer to resolve relevant grievance within a pre-specified
time frame, failing which the retailer risks attracting fines.

It was reported in November that retailers comply with
instructions in empowerment letters in more than 90% cases. The
service has been trained to handle grievances in more than 12
sectors and understands more than 40 laws and regulations
relating to consumer protection.

Imagine the utility of such a service in our country, wherein
the standard of customer support and grievance redressal is
abysmally poor. Consumer courts suffer from infrastructure and
capacity constraints and even simple matters drag on for years.
Our experience of consumer grievance handling reveals stark
information asymmetry among consumers and high opportunity cost
of filing and pursuing complaints. The use of AI in addressing
these constraints can go a long way in empowering consumers.

Alas, the discourse on AI has been captured by concepts such as
bots surpassing human intelligence, ethical use of AI, and
algorithmic bias. However, the potential of AI in empowering
consumers must not be lost sight of. A recent paper by Giuseppe
Contissa et al has done a huge service by bringing this issue
into the limelight.

The need to empower consumers is now more than ever, given the
unprecedented growth of the digital economy and global
interconnectedness. Fortunately, awareness about consumer
rights, especially privacy and data protection, has increased
manifold owing to the Puttaswamy judgment and discussions around
the draft personal data protection bill. Despite being aware,
consumers lack adequate tools to protect their privacy and data.
Measures hitherto suggested, such as increasing transparency by
providing more information, may result in information overload
and compound the asymmetry.

AI can help here as well. Tools like CLAUDETTE can be used for
automatic detection of potentially unfair clauses in contracts
and terms of service, and are being improved to assess
compliance with data protection regulation. PriBot and Polisis
provide AI-powered summaries and a free-form question answering
system for privacy policies. However, these tools are being
developed further, primarily interact in English, and require
users to approach them to obtain information. These constraints
may limit scalability in India.

Thus, there is a need of a bottom-up approach to leverage AI for
Indian consumers. Can AI-powered privacy labels be designed that
can present the most important terms and conditions, depending
on consumers’ likely profile and behaviour, in a format
preferred by them, thus facilitating informed decision making?
Can privacy policy reviewing tools automatically alert
regulatory agencies of unfair terms to overcome consumers’
lackadaisical attitude in enforcing their rights and filing
grievances? Customized solutions contextualized to meet specific
needs can go a long way in empowering Indian consumers.

The extraordinary progress in the digital economy coupled with
smartphone penetration in the country has put consumers in the
midst of an information deluge, making it difficult for them to
compare products intelligently. AI-empowered personal assistants
can help them navigate through exponentially growing data,
reduce search and transaction costs, overcome biases, and enable
more sophisticated choices. These tools may also help consumers
assess the trustworthiness and helpfulness of online consumer
reviews by analysing sentiment and polarity.

The day is not far when AI does not merely assist consumers in
decision making but takes decisions on behalf of consumers.
Michal S. Gal et al suggest that the next generation of
e-commerce will be conducted by digital agents, based on
algorithms that will not only make purchase recommendations but
will also predict what consumers want, make purchase decisions,
negotiate and execute transactions for consumers, and even
automatically form coalitions of buyers to enjoy better terms,
thereby replacing human decision-making.

Unsurprisingly, despite its potential in empowering consumers,
the increasing role of AI in the lives of consumers is fraught
with conceptual, moral, ethical and regulatory dilemmas. India’s
sociocultural and economic diversity may pose challenges and
delay the mass utilisation of AI, but such time needs to be
judiciously utilised in designing principles and frameworks to
address related dilemmas.

The time to discuss such principles and frameworks is not in the
future, but now. India is modernizing its regulatory frameworks
on privacy and data protection, consumer protection, e-commerce.
We cannot let go of this opportunity and need to be bold and
forward looking to move collectively towards consumer-empowering
AI.